Correlation Between Elmos Semiconductor and Novo Nordisk
Can any of the company-specific risk be diversified away by investing in both Elmos Semiconductor and Novo Nordisk at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Elmos Semiconductor and Novo Nordisk into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Elmos Semiconductor SE and Novo Nordisk AS, you can compare the effects of market volatilities on Elmos Semiconductor and Novo Nordisk and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Elmos Semiconductor with a short position of Novo Nordisk. Check out your portfolio center. Please also check ongoing floating volatility patterns of Elmos Semiconductor and Novo Nordisk.
Diversification Opportunities for Elmos Semiconductor and Novo Nordisk
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Elmos and Novo is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Elmos Semiconductor SE and Novo Nordisk AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Novo Nordisk AS and Elmos Semiconductor is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Elmos Semiconductor SE are associated (or correlated) with Novo Nordisk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Novo Nordisk AS has no effect on the direction of Elmos Semiconductor i.e., Elmos Semiconductor and Novo Nordisk go up and down completely randomly.
Pair Corralation between Elmos Semiconductor and Novo Nordisk
Assuming the 90 days trading horizon Elmos Semiconductor SE is expected to generate 0.6 times more return on investment than Novo Nordisk. However, Elmos Semiconductor SE is 1.66 times less risky than Novo Nordisk. It trades about 0.3 of its potential returns per unit of risk. Novo Nordisk AS is currently generating about -0.2 per unit of risk. If you would invest 6,730 in Elmos Semiconductor SE on October 15, 2024 and sell it today you would earn a total of 1,080 from holding Elmos Semiconductor SE or generate 16.05% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Elmos Semiconductor SE vs. Novo Nordisk AS
Performance |
| Timeline |
| Elmos Semiconductor |
| Novo Nordisk AS |
Elmos Semiconductor and Novo Nordisk Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Elmos Semiconductor and Novo Nordisk
The main advantage of trading using opposite Elmos Semiconductor and Novo Nordisk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Elmos Semiconductor position performs unexpectedly, Novo Nordisk can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Novo Nordisk will offset losses from the drop in Novo Nordisk's long position.| Elmos Semiconductor vs. ACCSYS TECHPLC EO | Elmos Semiconductor vs. Semiconductor Manufacturing International | Elmos Semiconductor vs. VELA TECHNOLPLC LS 0001 | Elmos Semiconductor vs. THORNEY TECHS LTD |
| Novo Nordisk vs. CARDINAL HEALTH | Novo Nordisk vs. YOOMA WELLNESS INC | Novo Nordisk vs. BE Semiconductor Industries | Novo Nordisk vs. Elmos Semiconductor SE |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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